Breaking: CBO releases the actual report; Update: Almost all $940 billion incurred in just six years; Update: Preliminary

posted at 11:25 am on March 18, 2010 by Ed Morrissey

It’s much as advertised. Thanks to its spending provisions mainly starting in 2014, the reconciliation bill combined with the Senate version has a total cost of $940 billion, with deficit savings of around $138 billion (via No Runny Eggs):

CBO and JCT previously estimated that enacting H.R. 3590 by itself would yield a net reduction in federal deficits of $118 billion over the 2010-2019 period, of which about $65 billion would be on-budget. The incremental effect of enacting the reconciliation proposal—assuming that H.R. 3590 had already been enacted—would be the difference between the estimate of the combined effect and the previous estimate for the Senate-passed bill, H.R. 3590. That incremental effect is an estimated net reduction in federal deficits of $20 billion over the 2010-2019 period over and above the savings from enacting H.R. 3590 by itself; almost all of that reduction would be on-budget (see the bottom panel of Table 1 and subtitle A of title II on Table 5). …

Although CBO does not generally provide cost estimates beyond the 10-year budget projection period, certain Congressional rules require some information about the budgetary impact of legislation in subsequent decades, and many Members have requested CBO’s analyses of the long-term budgetary impact of broad changes in the nation’s health care and health insurance systems. Therefore, CBO has developed a rough outlook for the decade following the 2010-2019 period by grouping the elements of the legislation into broad categories and (together with the staff of the Joint Committee on Taxation) assessing the rate at which the budgetary impact of each of those broad categories is likely to increase over time. Our analysis indicates that H.R. 3590, as passed by the Senate, would reduce federal budget deficits over the ensuing decade relative to those projected under current law—with a total effect during that decade that is in a broad range between one-quarter percent and one-half percent of gross domestic product (GDP).3 The imprecision of that calculation reflects the even greater degree of uncertainty that attends to it, compared with CBO’s 10-year budget estimates.

Using that same analytic approach, the combined effect of enacting H.R. 3590 and the reconciliation bill would also be to reduce federal budget deficits over the ensuing decade relative to those projected under current law—with a total effect during that decade that is in a broad range around one-half percent of GDP. The incremental effect of enacting the reconciliation bill (over and above the effect of enacting H.R. 3590 by itself) would thus be to further reduce federal budget deficits in that decade, with a total effect that is in a broad range between zero and one-quarter percent of GDP.

Undoubtedly, this is good news for Nancy Pelosi and the Democrats. The overall deficit reduction number from the CBO, as well as the under-$1 trillion price tag, gives them some momentum towards winning the votes of reluctant moderates. Whether they can overcome the issues of abortion and Demon Pass will still have to be seen, but at least on cost they have some ammunition.

That also applies to the reluctance in the Senate to take this bill back up again. The House version with the reconciliation package saves more money off of the deficit than the Senate version alone, at least according to the CBO. If the Senate balks at considering the reconciliation changes, they’ll essentially be writing off supposed savings to the deficit.

Republicans set part of their argument against the House effort on the CBO response, but not all of it. This doesn’t help build opposition to the bill, but it doesn’t stop it on the other grounds. Expect the GOP to push hard on abortion and the individual mandate, as well as Demon Pass in response.

Update (AP): Here’s the key table from CBO’s letter to Pelosi. Via Philip Klein, want to see what a shabby fraud these cost estimates are? Check out the line for “Gross Cost of Coverage Provisions”:

This is why they’re delaying the start of the program, of course. If it kicked in right away, the decade-long estimate would obviously be well into the trillions. So they simply stalled it for four years, incurring just $17 billion in costs — or 1.8 percent of the total 10-year estimate — through 2013 so that wavering Democrats could go back to their districts and tell baldfaced lies to their constituents about the pricetag. A perfect ending to this travesty.

Update (Ed): I’ve received a lot of e-mail asking me to emphasize that this is a preliminary CBO report. That’s true, but that’s exactly what was promised, too. Politically, I doubt it makes much difference — and generally speaking, the preliminary reports are in the ballpark with the eventual final analysis.

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Okay, so I am looking over the CBO letter, and the first thing that strikes me is this disclaimer:

Although CBO completed a preliminary review of legislative language prior to its release, the agency has not thoroughly examined the reconciliation proposal to verify its consistency with the previous draft. This estimate is therefore preliminary, pending a review of the language of the reconciliation proposal, as well as further review and refinement of the budgetary projections.

This suggests that the CBO has been trying to score a moving target, with Democrats making frequent tweaks to whip votes and/or hit deficit targets. So the CBO isn’t sure they’ve scored the final bill — hence they are calling this a “preliminary estimate.”

Congress Daily’s Anna Edney reports that a final CBO score will come out Saturday or Sunday, a most unfortunate bit of imprecision considering the vote on the bill will occur on the latter.

That argument is further over the heads of the non-politically sophisticated than say, “it will put more debt on our children”. Losing the deficit angle is a HUGE loss in terms of framing a message against Obamacare.

Right, and the Social Security “lock box” that these same politicos promised would be there for “the children” a decade ago is just bursting with cash today. because they said it would be there. And they assured us it would be there. Just like they’re assuring us

Question for ernesto, other ObamaCare shills: Name ONE government program that has EVER cost less in the long term than was originally projected. Just one.

In total seriousness, can someone explain to me how spending $940 billion dollars reduces the deficit by $138 billion? Does the health care bill invest in stocks or something? How is this even possible?

Mighty Skip on March 18, 2010 at 11:33 AM

In theory, the savings come from more efficiency and less fraud. In reality, any deficit reduction in this plan will come from providing fewer services to people who are already on Medicare and Medicaid.

“Although CBO completed a preliminary review of legislative language prior to its release, the agency has not thoroughly examined the reconciliation proposal to verify its consistency with the previous draft. This estimate is therefore preliminary, pending a review of the language of the reconciliation proposal, as well as further review and refinement of the budgetary projections.”

How can a program that doesn’t yet exist, even in written form, reduce a future deficit?
And doesn’t deficit reduction of any kind have to assume that Congress and Obama quit spending like an addict with a printing press?

It sure looks like smoke and mirrors to me and like the CBO has become irrelevent.

Ain’t nothing over until it’s over. States are passing laws as we speak that nullify forced participation in Obamacare. It will be interesting to see how the Feds force the States to participate in violation of their own laws.

If it kicked in right away, the decade-long estimate would obviously be well into the trillions. So they simply stalled it for four years, incurring just $17 billion in costs — or 1.8 percent of the total 10-year estimate — through 2013

This is called a “liberal discount.” Taxpayers pay for ten years and get 6.5 years of benefits. It’s exactly the opposite of what you would expect in a market-driven system.
.
Of course, by 2014, when the taxpayers are allowed to begin collecting benefits, the prepayments of 2010 through 2013 will have disappeared and taxes will have to be raised to replace the lost funds.
.
Mark my words: Government never adheres to a budget – it has no incentive to do so.

My numbers are about as good as theirs. Both point to one thing: An entitlement program we will not be able to afford and which will bankrupt this country with a flood of funny money from the fed sooner rather than later.

Ask yourself this: If China or anyone else with a smidgen of common sense decides they no longer wish to buy our crap bonds, where will this magic money come from? Taxes? No sir. They’ve already squeezed that nickle dry and people are losing jobs left and left. No businesses starting up, so the revenue stream is dwindling, not increasing. Where then? Oh yeah, the funny money from the fed – made out of air and paper.

When inflation hits double digits and we’re still throwing money at all these fixes and entitlements, what then?

It’s a process everyone can see happening but no one wants to steer the ship away from the iceberg. Now why is that? Why would our “President” spend such a massive amount of money on stuff we simply cannot afford??? Is he stupid? Is he doing it on purpose??? Why???

That’s the question I wanted Bret Bair to ask. To hell with Tiger Woods.

Question for ernesto, other ObamaCare shills: Name ONE government program that has EVER cost less in the long term than was originally projected. Just one.

We’ll wait. Pardon us if we laugh.

Good Lt on March 18, 2010 at 11:55 AM

Ive not made a value judgment on policy, just stating the political realities as I see them. Of course programs come in over budget, I’m not arguing that. In your quest for snark you come up empty yet again.

That argument is further over the heads of the non-politically sophisticated than say, “it will put more debt on our children”. Losing the deficit angle is a HUGE loss in terms of framing a message against Obamacare.

ernesto on March 18, 2010 at 11:51 AM

So the Dems will just lie about it instead? The GOP hasn’t lost the deficit angle.

Health care spending is already #1 on the list. Anyone with half a brain knows that this thing will explode in the future just like Medicare. Which brings me back to my original point. The Dems had to lie, cheat, and steal to even get a favorable CBO report, and even the CBO says in the report that their very report is useless without official reconciliation bill language.

Fun fact of the day:

In 1913, when the Federal Reserve was created with the duty of preserving the dollar, one 20-dollar bill could buy one 20-dollar gold piece. Today, fifty 20-dollar bills are needed to buy one 20-dollar gold piece. Under the Fed’s custody, the U.S. dollar has lost 98 percent of its value. The dollar is the storehouse of our wealth. Has the Fed faithfully safeguarded that storehouse? Was it not Thomas Jefferson who taught us, “In questions of power let us hear no more of trust in men, but bind them down from mischief with the chains of the Constitution”?

One thing this whole fiasco proves is that the CBO is effectively a non-entity as far as contributing to any sort of policy dialoge in the future. There are so many assumptions in their analysis and the process has been so gamed by the expert legislation writers in Congress, that the CBO is now a nullity. From now on, legislation will be written so as to get a favorable rating from the CBO, regardless of what the actual impact may be on the economy.

Ive not made a value judgment on policy, just stating the political realities as I see them. Of course programs come in over budget, I’m not arguing that. In your quest for snark you come up empty yet again.

I can’t see how any of this is going to save us anything. You all know what’s going to happen we are going to be paying interest on these so called savings because the lock boxes are going to be filled with IOU’s. Where do you think SS is going to get it’s money for payouts. So in 4 years I don’t even want to think what’s going to happen. You know next year the dems are going to try and put through the public option no matter if the Republicans gain the house or not.

The CBO is not a universally distrusted outfit. The argument you lay out there is already above most people’s heads. But even if it were simple enough for everyone to grasp, do you really expect the GOP to publicly write off the CBO, so as to NEVER be able to use its projections for their own policies? Not gonna happen.

One thing this whole fiasco proves is that the CBO is effectively a non-entity as far as contributing to any sort of policy dialoge in the future. There are so many assumptions in their analysis and the process has been so gamed by the expert legislation writers in Congress, that the CBO is now a nullity. From now on, legislation will be written so as to get a favorable rating from the CBO, regardless of what the actual impact may be on the economy.

WarEagle01 on March 18, 2010 at 12:00 PM

My take is that Obama pushed the “savings” aspect, which didn’t gain traction until this particular report. And the timing is everything. We won’t have time to ask questions about how Medicare costs will be reduced, for example.

At this stage, I can’t see that dragging it on and on will benefit either party or the public. It’s devolved.

Question for ernesto, other ObamaCare shills: Name ONE government program that has EVER cost less in the long term than was originally projected. Just one.
We’ll wait. Pardon us if we laugh.
Good Lt on March 18, 2010 at 11:55 AM

I would like to ask that, but I won’t lay all of that on ernesto.

BTW, did you see the story:Rep. Paul Ryan: Obama’s New Budget Will ‘Literally Crash the U.S. Economy’

(CNSNews.com) – Rep. Paul Ryan (R.-Wis.), the ranking member of the House Budget Committee, told CNSNews.com that the new fiscal year 2011 budget proposed by President Barack Obama will “literally crash the U.S. economy” with the additional debt it plans for the federal government.

This is why they’re delaying the start of the program, of course. If it kicked in right away, the decade-long estimate would obviously be well into the trillions. So they simply stalled it for four years, incurring just $17 billion in costs — or 1.8 percent of the total 10-year estimate — through 2013 so that wavering Democrats could go back to their districts and tell baldfaced lies to their constituents about the pricetag. A perfect ending to this travesty.

THANK YOU AP for pointing out the DemocRATS fraudulent numbers and sleight of hand.

House Budget Committee Ranking Republican Paul Ryan responds to an NRO query about the news this morning: “The Congressional Budget Office has confirmed that there is currently no official cost estimate. Yet House Democrats are touting to the press — and spinning for partisan gain — numbers that have not been released and are impossible to confirm. Rep. James Clyburn stated he was ‘giddy’ about these unsubstantiated numbers. This is the latest outrageous exploitation by the Majority — in this case abusing the confidentiality of the nonpartisan Congressional Budget Office — to pass their massive health care overhaul at any cost.”

This CBO reporting this morning really is remarkable to me — the news is simply what Steny Hoyer says it is.

Your still going to have to pay taxes on this no matter if the states say it’s illegal or not. The whole tax and mandate thing is going through the IRS. So there’s no way around that unless you don’t pay. What happens if you don’t pay your taxes.

Ain’t nothing over until it’s over. States are passing laws as we speak that nullify forced participation in Obamacare. It will be interesting to see how the Feds force the States to participate in violation of their own laws.
Guardian on March 18, 2010 at 11:58 AM

Exactamundo!!

It wasn’t over when the Germans Bombed Pearl Bailey, and it’s not over now!

Although CBO completed a preliminary review of legislative language prior to its release, the agency has not thoroughly examined the reconciliation proposal to verify its consistency with the previous draft. This estimate is therefore preliminary, pending a review of the language of the reconciliation proposal, as well as further review and refinement of the budgetary projections.

The Democrats, citing Congressional Budget Office projections, claim the latest version of the health care bill will cut the budget deficit by more than $100 billion in the first decade and $1.2 trillion in the second. As before, those projections depend on Medicare cuts that, given Congress’ track record in this area, probably will not be sustained. Furthermore, the Democrats continue to double count Medicare savings, pretending to use them both to pay for insurance subsidies and to improve the program’s long-term financial condition.
[...]
[Obama] admits that “you can’t say that you are saving on Medicare and then spend the money.” Yet that is exactly what Obama and his allies in Congress keep doing.

The CBO is not done with the money crunching. The Reps had better yell this loudly and clearly.

kingsjester on March 18, 2010 at 12:02 PM

How can they when the reconciliation bill hasn’t even been written? This is all bogus accounting with the CBO walking a fine line from their mission and the politics of the situation. In short the CBO is being expected to cost out something for which they have been given no details. They are in a lose/lose situation.

Also on CBO Website: Panel of Health Advisors: Consisting of acknowledged experts in health care, CBO’s panel of health advisers meets periodically to examine frontier research in health policy and to advise the agency on its analyses of health care issues. The panel thus helps to further the reliability, professional quality, and transparency of CBO’s work. In addition, the agency has a Panel of Economic Advisers.

I don’t care. They aren’t there to examine or research health policy to taint their analysis of the “economics” of policies that are to be enacted by Congress. They are just suppose to get the bills and run the math and tell us what the costs will be. That’s it!!

Idaho’s governor signed a law banning the universal mandate for their state. Virginia’s legislature has passed the law but it is not yet signed by Governor McDonnell. Reportedly there are 37 states considering some similar actions.

Ask yourself this: If China or anyone else with a smidgen of common sense decides they no longer wish to buy our crap bonds, where will this magic money come from? Taxes? No sir. They’ve already squeezed that nickle dry and people are losing jobs left and left. No businesses starting up, so the revenue stream is dwindling, not increasing. Where then? Oh yeah, the funny money from the fed – made out of air and paper.

When inflation hits double digits and we’re still throwing money at all these fixes and entitlements, what then?

It’s a process everyone can see happening but no one wants to steer the ship away from the iceberg. Now why is that? Why would our “President” spend such a massive amount of money on stuff we simply cannot afford??? Is he stupid? Is he doing it on purpose??? Why???

That’s the question I wanted Bret Bair to ask. To hell with Tiger Woods.

Thunderstorm129 on March 18, 2010 at 11:59 AM

The major problem with all the entitlements (well, they are rife with problems from top to bottom) is that they are indexed to inflation.

Any attempt to inflate our way out of the entitlements nightmare is bound to fail. Doctors will demand $5,000 for an office visit or they won’t treat you. Unless the government starts forcing them at gunpoint. Which I wouldn’t put past these *ssholes.

The Left is in a perpetual state of 1960′s nostalgia. They actually seem to believe the welfare state is doing a good job and that none of its flaws, as revealed over the past 40+ years, are real.

Hoyer is my rep. I can’t stand that total piece of sh!t. Saw him once at a McDonalds years ago believe it or not. He actually looked me in the eye as he was walking out with his people. Man how I wish I had given him the finger now.

Well none of this matters, does it? What’s REALLY important is that 13% of the people get health care at the expense of others.

Some want to demonize doctors. Well go ahead. Because after this crap passes…most doctors are going to quit…and the rationing begins. You’ll get what you wished for, but I remember pointing out, to be careful about that.

Unfortunately this 13% will take the rest of us down with them. Idiots!!!

We won’t have time to ask questions about how Medicare costs will be reduced, for example.

At this stage, I can’t see that dragging it on and on will benefit either party or the public. It’s devolved.

AnninCA on March 18, 2010 at 12:03 PM

Ann,

You’re still viewing this debate as if it were about healthcare. It is not, and never has been.

It has always been about government control of 1/6 of the US economy. It has also been about a steath bailout of the Social Security system. At least one version of this monster bill included a provision in which the “secretary” would have authority to transfer funds to the SSA as needed. You might think this is intended to fund MediCare “as needed”. Surely it is, but it also allows fully 1/6 of the US economy to be re-directed to support the mother of all ponzi schemes. It also will have the effect of “fixing” SSA without ever talking about it in Congress.

Think about that. What happens when SSA sucks all the ObamaCare funds? What then? What part of the economy will then be nationalized to pay for the entitlement programs?

Look at the alleged “revenues:” $4 billion/year in penalties from individuals not buying into this steaming pile of dung? $11 billion from employers ditto? How much is Osama Obama going to charge those people?

I’m guessing a more honest figure would include at least twice the costs, and half the “revenues.”

If you or I ran our finances that way, we’d be bankrupt or in prison. The latter is where the traitors who came up with this crap belong.

Give the CBO a break. They are being asked to “price out” something for which they have been given no details. All that mattered was a mythical number that could be used as proof that Obama is a deficit hawk (pause for laughing to subside).

Question for the ObamaCare shills: Name ONE government program that has EVER cost less in the long term than was originally projected. Just one.
We’ll wait. Pardon us if we laugh.
Good Lt on March 18, 2010 at 11:55 AM

Thanks for the tip. Gotta check out ND & see if they’re one of those 37 states.
But I think Dorgan made one of those sweet deals bcs that bill would decimate rural hospitals & clinics, so I wonder.

BobMbx on March 18, 2010 at 12:15 PM

I think Ann’s clueless, personally.
Oh she seems nice & I don’t know if that’s real or contrived.
But whatever the case, she seems to think each issue is always separate & it isn’t, as you pointed out.
This is an ideological war.
One for govt controlling us & the other for letting us pursue our own happines, no matter if we end up doing well or not.

Ann, you get blasted bcs you’re a fence sitter.
And in life, there is really eventually either one ideology or another.
Either you want the govt to intrude upon your life or you don’t.
It’s really as simple as that.

It has always been about government control of 1/6 of the US economy. It has also been about a steath bailout of the Social Security system. At least one version of this monster bill included a provision in which the “secretary” would have authority to transfer funds to the SSA as needed. You might think this is intended to fund MediCare “as needed”. Surely it is, but it also allows fully 1/6 of the US economy to be re-directed to support the mother of all ponzi schemes. It also will have the effect of “fixing” SSA without ever talking about it in Congress.

Think about that. What happens when SSA sucks all the ObamaCare funds? What then? What part of the economy will then be nationalized to pay for the entitlement programs?

BobMbx on March 18, 2010 at 12:15 PM

Bob, I think it’s going to be what it will be. I think the problem is the economy, not the programs.